Another give and take.. and take to the fullest

We are at the critical junction. We broke the last week's support where we had a nice hammer pattern and then we had a nice rally which kind of challenged the July High but then it got dizzy due to shaky political in decision

As you can see from the below there is support at 200 day MA 1284 level and then last recent support  1258 where the market was stopped.

As usual, I am not getting into the prediction business but let the market tip its hand. Currently I am all in Cash in all accounts. I am also long VIX calls as any more upside or downside will contribute to volatility. Currently the VIX levels are at kind of "EVENT" levels.  where both index calls and puts are bit expensive.

So lets give a week for market to tip its hand before committing any capital. 

Rally after oversold conditions

As noted last week, there were deep oversold conditions and we got a very nice bounce back on hopes of debt crisis resolution. The Breadth indicators have also turned positive and now we wait for the break of July highs of 1346 and then ultimate Bin Laden high of 1370.

After the break of 1346, market might pullback to relieve the overbought conditions that will happen with that kind of price movement, something to be aware of before you fully back up the truck or putting tight stops at that junction.

After that, the dip hold confirmation will create a big bullish thrust and during that situation everyone should be making money.

Just remain aware this this is a news and earnings event driven market so trade accordingly.

Mentoring Chat Session

Rally running into Stumbling Blocks and Oversold conditions..

As you have seen market ran up and made great strides. Some of the stocks made almost 30% + moves (see the list below).

After that few days of thrust, the rally immediately ran into trouble with bad job number (18,000 jobs added instead of forecasted 125,000, that is a huge miss).

Now with this pullback we are at very critical junction, We are sitting on the 50d SMA with stochastics in the oversold zone. This 50 d MA zone is one critical zone where market cannot sit on for long as you can see from the past history.. (this is even true for stocks).

With Earnings around the corner, with Google stunning the streets with positive kicker and QE3 chatter and  oversold conditions, we are due for an attack back to highs created earlier this month.

As with anything, we trade the price action and trade accordingly.

Some of the ETFs of interest, here are as follows:
SLV, FXC, IEO, GDX, IDX, IGE, EWJ, ITF, FXY, JJC and IYE

Summer Rally

Summer Rally

As shown in the picture below, Friday saw very good bullish signs. There was a break of Longer term bearish downtrend. There was a Bullish thrust on the Accumulation-Distribution Study also. 

Also other indicators that I follow, BPNYA crossed its 10day MA, my VIX model and the Stockbee's Market Monitor is also now in the Bullish Thrust mode. 

We should expect a move to June 1 highs around 1345 in the upcoming week before this rally stalls. Enjoy the bullish mode till it lasts. 

I bought some ETFs in my ETF portofolio. Full portfolio available on: http://tinyurl.com/3bku4ev

Mentor Club

Since some of you know that I have been asked by a close friend of mine to teach his son how to trade. He is a complete newbie and I have never taught anyone like this. The only people I have taught like this are the prep Math and basic Physics student during my University days. Most of the time, I am talking to someone who has done bit of trading themselves or using some advisory service. So this should be fun exercise. 


As I am setting up the material, I am thinking  of helping some of you folks who have been asking me for one on one help, I am setting up a Mentor Club to help some of you folks out.


The goal here is to become self-reliant and help others.
(Principle of life to follow: What goes around comes around to help you (or destroy you))

This is what I am planning:

 - General understanding of markets

 - Understanding what is going on currently. 

 - Use of basic tools on hand to figure out action plan(s) 

   This might be broken down into more detailed session after the monthly performance review.. 

 - Going over the basic mindset.. how psychology affects your plan.

 - Designing a solid trading plan around your mindset with very specific rules

 - Monthly review of your trades to fine tune your execution skills and performance improvement. 

If interested, please e-mail me on marketing1977@gmail.com.


Also I plan on taking on 7 or 8 members initially.